Responsible supply chain

Introduction

Scatec purchases goods and services from a wide variety of suppliers, ranging from large international organisations to specialist local suppliers worldwide. We mainly source services and components during the development and construction phases of our projects.

Management approach

Our supply chain management work is guided by international standards including the IFC Performance Standards, OECD Due Diligence Guide for Responsible Business Conduct, the UN Guiding Principles on Human Rights and industry best practice.

Scatec conducted a gap analysis of our supply chain management from an ESG perspective in collaboration with a third party. A key focus of the analysis was to gain a better understanding of our supply chain’s ESG risks and impacts including labour and human rights, environment and climate, corruption, and health and safety. In addition, to review our monitoring and follow-up procedures and explore collaboration opportunities. The outcome of the analysis is a comprehensive implementation plan to strengthen our supply chain management currently being implemented.

GRI 308-1 : GRI 414-1

New suppliers that were screened using environmental and social criteria

We regularly assess sustainability risks within our supply chain and seek to mitigate these risks through our supplier development programme, transparent and fair tender processes, robust contracting, pre-production audits and monitoring during production.

Read more about GRI 308-1 and GRI 414-1 here.

GRI 204-1

Proportion of spending on local suppliers

We work to strengthen our local supplier base by identifying short, medium and long-term services that could be supplied by entrepreneurs in the local communities surrounding our solar plants. This can be achieved through targeted supplier development initiatives that promote local capability and capacity building.

Typically, aligned to local regulations and our power purchase agreements (PPAs), our engineering, procurement and construction (EPC) scope for local content includes construction, staff, accommodation, travel and other minor procurement. In regions where we have established operations and there is a developed supply chain in country, we strive to engage local service providers for various essential operations and maintenance (O&M) projects such as module washing and vegetation control.

Key metrics

100%

of contracted suppliers signed the supplier code of conduct in 2021

59%

potential and contracted suppliers of key components screened through EcoVadis

(as at 31 March 2022)

57%

spend on local suppliers in the operations phase in 2021

100%

of supply chain members received sustainability training on key ESG topics

Accounting Policy

Scatec reports on the percentage of suppliers that were screened using E&S criteria as well as the percentage of local spend during the year. Key definitions:

Suppliers: providers of goods and services to Scatec (primarily within the Solution/Execution business unit), unless otherwise specified.
Key suppliers: suppliers that Scatec directly engages for the supply of goods, and in some cases services (such as transportation management), to deliver our renewable power projects.
Local suppliers: providers of goods and services to Scatec (Solution/Execution) registered in the country that the relevant power plant is based in.

Main procurement items: unless otherwise specified, include modules, inverters, substructures and wind turbines.
Significant locations of operations: locations with power plants in operation with total installed capacity of more than 20 MW.